Introduction

"The Constitution was framed under the dominion of a political philosophy less parochial in range. It was framed upon the theory that the peoples of the several states must sink or swim together, and that in the long run prosperity and salvation are in union and not division." Baldwin v. G. A. F. Seelig, Inc., 294 U.S. 511, 523 (1935).

In our panels on Congress, we discussed the Congressional power to regulate commerce. In those panels, we discussed what Congress could do with the Article I commerce power, and what it could not do. But there is another aspect of commerce in our federal system: what powers do the states have regarding commerce--when does the exercise of those powers interfere with the Congressional power to regulate commerce. The Constitution was born in part from a concern that the loose confederation of states had destroyed commerce by imposing burdensome and often inconsistent regulations, tolls and tariffs upon the movement of commerce among the states. The Federalist Justices who were first appointed to the Supreme Court believed, as article of constitutional faith, therefore, that the states could not unduly interfere with Commerce. They could have waited for Congressional legislation to implement this principle. They might have concluded that Congress, as representatives of the people, should apportion these powers among the federal and state governments. The Constitution contains express limitations on state interference with foreign commerce, but no such express limitations on state interference with interstate commerce. Instead, the Supreme Court has historically sought to establish ground rules in this area, even in the absence of legislation. This panel discusses the so-called dormant commerce clause: the non-existent clause which rests upon the theory that certain regulatory powers are implicitly denied the states in the area of commerce, unless Congress specifically acts to yield those powers to the states. In its Camps/Newfound decision the Court wrote:

• During the first years of our history as an independent confederation, the National Government lacked the power to regulate commerce among the States. Because each State was free to adopt measures fostering its own local interests without regard to possible prejudice to nonresidents, what Justice Johnson characterized as a "conflict of commercial regulations, destructive to the harmony of the States" ensued. In his view, this "was the immediate cause that led to the forming of a [constitutional] convention. ...If there was any one object riding over every other in the adoption of the constitution, it was to keep the commercial intercourse among the States free from all invidious and partial restraints." In short, the Commerce Clause even without implementing legislation by Congress is a limitation upon the power of the States. Southern Pacific Co. v. Arizona ex rel. Sullivan, 325 U.S. 761 [(1945)]; Morgan v. Virginia, 328 U.S. 373 (1946)." Freeman v. Hewit, 329 U.S. 249, 252 (1946).

Professor Tribe points out that two views competed for dominance in the 19th century. Under Justice Marshall's view, regulation of commerce belonged exclusively to the United States. Under this view, state laws could impact upon commerce indirectly to some extent when accomplishing some other legitimate purpose, but regulation of commerce for the sake of regulating commerce is absolutely barred. Under Justice Taney's view, a pre-emption approach, states could regulate commerce so long as regulation did not interfere with Congressional regulation. Professor Schwartz calls the approach ultimately adopted by the Court the selective exclusiveness approach. Under this approach, the Court must determine whether it is imperative that the subjects of the regulation be governed by a uniform national system. The Court must balance state and local interests on a case by case basis. By making case-by-case decisions, the court gradually developed a "common law" of the commerce clause.

Congress may cede regulatory powers to the several states: In Cooley v Board of Wardens (1851), an important early commerce clause case, the Court upheld a Pennsylvania law requiring ships using the port of Philadelphia to use a local Philadelphia pilot. An existing act of congress had stated that the harbors and ports of the United States shall "continue to be regulated in conformity with the existing laws of the states" or "with such laws as the states may hereafter enact." Cooley challenged the state regulation, claiming that the Constitution barred states from regulating commerce. The Cooley decision merely held that Congress had the power affirmatively to defer to state regulation:

• It is the opinion of a majority of the court that the mere grant to congress of the power to regulate commerce, did not deprive the states of power to regulate pilots, and that although Congress has legislated on this subject, its legislation manifests an intention...not to regulate this subject, but to leave its regulation to the several states.

In short, the dormant commerce clause does not bar Congress from authorizing state regulation. Indeed, Congress may explicitly grant to the states authority to enact legislation which discriminates against interstate commerce. Do you think that the Court would have upheld Pennsylvania's law in the absence of the Congressional authorizing legislation? Would it make a difference if Philadelphia established municipal docks and determined that pilots must be municipal employees?

First Inquiry: Evaluating the State's powers in commerce, thus involves the following inquiries:

1. Has Congress explicitly determined the limits of state authority (either by consenting or prohibiting state regulation)? If so, the will of Congress will prevail.
2. Has the state legislated in an area where the national interest in uniformity outweighs state interests? If so, then even in the absence of Congressional legislation, state legislation violates the dormant commerce clause.

Recall that the definition of commerce used by the Court to determine the scope of Congressional powers has dramatically broadened since the New Deal Decisions. In other words, it may be argued that when the founders envisioned uniformity in interstate commerce, they had a much narrow vision of "commerce" in mind. Now that the scope of the federal commerce clause has expanded, does it follow that the dormant commerce clause should expand along with it? Do the policies which led the Court to broaden Congressional power expressly to legislate necessarily lead to a corresponding broadening of the scope of the dormant commerce clause's reach? The Court believes that the answer is yes:

• Although Heart of Atlanta [a decision broadening Congressional power over Commerce] involved Congress' affirmative Commerce Clause powers, its reasoning is applicable here. As we stated in Hughes v. Oklahoma, 441 U.S. 322 (1979), "The definition of `commerce' is the same when relied on to strike down or restrict state legislation as when relied on to support some exertion of federal control or regulation." Camps Newfound/Owatonna, Inc v Town of Harrison.

Has Congress Authorized local regulation: How does the Court determine whether Congress has authorized local regulation? What if Congressional intent is somewhat unclear. Shouldn't the Court presume that one Congress legislates in an area, it should express its intent with clarity? It could be argued that if Congress acts in an area, but doesn't make its intent clear, then it is intentionally leaving room for the states to regulate. In SOUTH-CENTRAL TIMBER DEV. v. WUNNICKE, 467 U.S. 82 (1984), the Supreme Court articulated (or confirmed) the contrary rule. In fact, the Court noted that prior precedent had regularly struck down local discriminatory regulation, even where federal legislation seemed largely to defer to local government:

• ... most of our cases have looked for an express statement of congressional policy prior to finding that state regulation is permissible. For example, in Sporhase v. Nebraska ex rel. Douglas, the Court declined to find congressional authorization for state-imposed burdens on interstate commerce in ground water despite 37 federal statutes and a number of interstate compacts that demonstrated Congress' deference to state water law. We noted that on those occasions in which consent has been found, congressional intent and policy to insulate state legislation from Commerce Clause attack have been "expressly stated." 458 U.S., at 960 . Similarly, in New England Power Co. v. New Hampshire, 455 U.S. 331 (1982), we rejected a claim by the State of New Hampshire that its restriction on the interstate flow of privately owned and produced electricity was authorized by 201(b) of the Federal Power Act. That section provides that the Act "shall not . . . deprive a State or State commission of its lawful authority now exercised over the exportation of hydroelectric energy which is transmitted across a State line." 16 U.S.C. 824(b). We found nothing in the statute or legislative history "evinc[ing] a congressional intent `to alter the limits of state power otherwise imposed by the Commerce Clause.'" 455 U.S., at 341 (quoting United States v. Public Utilities Comm'n of California, 345 U.S. 295, 304 (1953)).

Congress must "expressly state" or expressly manifest its intention to authorize local regulation which would otherwise be prohibited by the dormant commerce clause:

• There is no talismanic significance to the phrase "expressly stated," however; it merely states one way of meeting the requirement that for a state regulation to be removed from the reach of the dormant Commerce Clause, congressional intent must be unmistakably clear. The requirement that Congress affirmatively contemplate otherwise invalid state legislation [467 U.S. 82, 92] is mandated by the policies underlying dormant Commerce Clause doctrine. It is not, as Alaska asserts, merely a wooden formalism. The Commerce Clause was designed "to avoid the tendencies toward economic Balkanization that had plagued relations among the Colonies and later among the States under the Articles of Confederation." Hughes v. Oklahoma, 441 U.S. 322, 325 (1979). Unrepresented interests will often bear the brunt of regulations imposed by one State having a significant effect on persons or operations in other States. Thus, "when the regulation is of such a character that its burden falls principally upon those without the state, legislative action is not likely to be subjected to those political restraints which are normally exerted on legislation where it affects adversely some interests within the state." South Carolina State Highway Dept. v. Barnwell Brothers, Inc., 303 U.S. 177, 185 , n. 2 (1938); see also Southern Pacific Co. v. Arizona, 325 U.S., at 767 -768, n. 2. On the other hand, when Congress acts, all segments of the country are represented, and there is significantly less danger that one State will be in a position to exploit others. Furthermore, if a State is in such a position, the decision to allow it is a collective one. A rule requiring a clear expression of approval by Congress ensures that there is, in fact, such a collective decision and reduces significantly the risk that unrepresented interests will be adversely affected by restraints on commerce.

Whose facts control: A common law of individual cases has developed, in health and safety regulation, in taxation, in economic regulation, in local efforts to prohibit commerce considered immoral or dangerous, and more recently in the area of solid waste disposal. The principles developed by decisional law are discussed in the next panels. A finding of discriminatory impact may rest on facts. In each of these cases, the Court must apply economic facts and principles to complex legislation. Dormant commerce clause cases, by their very nature involve policy determinations where Congress has not specifically acted. This has led to a discussion of the role of the state legislatures, the state and federal judiciary, and Congress in determining the factual predicates for the Supreme Court's dormant commmerce clause decisions. Should individual Justices apply their own individual economic theories, and their own particular belief systems, to arrive at economic justifications? Or, should the decisions rest upon facts developed at a trial, as determined by a single unelected judge. Justice Black believed that the Court creates grave difficulties when it relies upon trial court evidentiary records and trial factual findings to establish commerce clause policy. Black believed that the Court needed to defer more to State legislatures. Black argued that if the Court erred, Congress could always fix the problem by passing appropriate legislation using its commerce clause powers. In a recent decision involving state taxation of the natural gas industry, the Court recognized the difficulties inherent in making economic policy in complex regulated industries:

• One need not adopt Justice Black's extreme reticence in Commerce Clause jurisprudence to recognize in this instance the soundness of his statement that a challenge like the one before us "call[s] for Congressional investigation, consideration, and action. The Constitution gives that branch of government the power to regulate commerce among the states, and until it acts I think we should enter the field with extreme caution." Northwest Airlines v. Minnesota, 322 U.S. 292, 302 (1943) (concurrence)." General Motors v Tracy (1997). (See our further discussion infra).

Consider Justice Scalia's criticism, and minority view, of the dormant Commerce clause in recent decisions:

I have previously recorded my view that the Commerce Clause contains no "negative" component, no self operative prohibition upon the States' regulation of commerce. "The historical record provides no grounds for reading the Commerce Clause to be other than what it says--an authorization for Congress to regulate commerce." Tyler Pipe Industries, Inc. v. Washington State Dept. of Revenue, 483 U.S. 232, 263 (1987) (Scalia, J., concurring in part and dissenting in part); see also American Trucking Assns., Inc. v. Smith, 496 U.S. 167, 202-203 (1990) (Scalia, J., concurring in judgment). On stare decisis grounds, however, I will enforce a self executing, "negative" Commerce Clause in two circumstances: (1) against a state law that facially discriminates against interstatecommerce, and (2) against a state law that is indistinguishable from a type of law previously held unconstitutional by this Court. These acknowledgments of precedent serve the principal purposes of stare decisis, which are to protect reliance interests and to foster stability in the law. I do not believe, however, that either of those purposes is significantly furthered by continuing to apply the vague and open ended tests that are the current content of our negative Commerce Clause jurisprudence, such as the four-factor test set forth in Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 279 (1977), or the "balancing" approach of Pike v. Bruce Church, Inc., 397 U.S. 137 (1970). Unlike the prohibition on rank discrimination against interstate commerce, which has long and consistently appeared in the precedents of this Court, see New Energy Co. of Indiana v. Limbach, 486 U.S. 269, 273 (1988), those tests are merely the latest in a series of doctrines that we have successively applied, and successively discarded, over the years, to invalidate nondiscriminatory state taxation and regulation--including, for example, the "original package" doctrine, see Leisy v. Hardin, 135 U.S. 100 (1890), the "uniformity" test, see Case of the State Freight Tax, 15 Wall. 232, 279-280 (1873), cf. Cooley v. Board of Wardens of Port of Philadelphia, 12 How. 299, 319 (1852), the "directness" test, see Hall v. DeCuir, 95 U.S. 485, 488-489 (1878), and the-privilege of doing interstate business" rule, see Spector Motor Service, Inc. v. O'Connor, 340 U.S. 602, 609 (1951). Like almost all their predecessors, these latest tests are so uncertain in their application (and in their anticipated life span) that they can hardly be said to foster stability or to engender reliance deserving of stare decisis protection.